Rate Update December 2, 2010
Mortgage rates are worse again today.
Mortgage-backed bonds (MBS’s) took a beating yesterday which is why rates are higher this morning. For the day MBS’s dropped 131 basis points. We’ve witnessed drops of over 90 basis points three times in the past 3 weeks. Prior to this we haven’t seen moves this acute since June of 2009.
The European Central Bank announced today that it would continue to provide emergency support to banks in the Euro-zone. Most investors have already abandoned the flight-to-safety trade that helped push yields lower but those who are left are likely to do so in the next couple weeks adding selling pressure to US debt securities and pressuring yields higher.
The National Association of Realtor’s pending homes sales index unexpectedly spiked higher last month according to their latest release. This helping stocks to trade higher this morning.
From a technical perspective interest rates look ripe for a reversal lower, albeit only by .125% at best. However, tomorrow is the all-important jobs report. I don’t need to remind you that rates have risen by .50% since last month’s report beat expectations. The markets are expecting 130,000-150,000 new jobs to have been added last month.
I am recommending floating into the end of the day today.
Current outlook: floating for the duration of today
Posted: December 2nd, 2010 under Rate Update.
Tags: dec 2 2010 MBS, dec 2 2010 mortgage rates, dec 2 2010 outlook for rates
Comment from Tom Clark
Time December 3, 2010 at 6:54 am
Evan,
I was googling information on your grandmother “Irene Swanson” when this web site showed up under the name “Addie Irene Swanson”.
This is a very impressive site, I’ll keep it as one of my favorites. Tom